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5 January 2023



Offshore Development Center: Taking Offshoring to the Next Level

Offshore development is the next best thing in outsourcing. In the modern world, you can easily surpass geographic and cultural boundaries and find the best software development team. According to Mordor Intelligence, the IT outsourcing market will reach a staggering $682 billion by 2027. Moreover, this report indicates that 92% of the top global public companies use IT outsourcing. It means that even more companies will use outsourcing, and an approach such as Offshore Development Center will be in huge demand.

Keeping all these aspects in mind, it is time to understand how to get the most out of the Offshore Development Center phenomenon. It means knowing what it is, how to set it up, and what pitfalls you might encounter.

What is an Offshore Software Development Center?

In a nutshell, an Offshore Software Development Center is a facility located in a foreign country, that has all the necessary office equipment and tech experts in servicing your team augmentation needs. In other words, the Offshore Development Center is a pinnacle of an outsourcing model. It entails having an office with experts, specialists, and/or virtual teams abroad. Yet, they work and follow the same procedures as your in-house team.

Opening a dedicated Offshore Development Center is a great way to save costs and tap into the global talent pool. For instance, software engineers in the United States charge much more than Bulgaria software engineers. Yet, they both provide almost the same quality of services. So, at this point, you can save costs on the difference and still receive the software product you need.

How to Set Up a Software Development Center Offshore?

Knowing what to expect from a Software Development Center offshore, it is time to see how you can set one up. In general, the process of getting the Offshore Development Center up and running entails eight steps:

  1. First and foremost, you need to choose a location, the country that will host your new office
  2. Then, hire a local legal consultant or a vendor tasked with managing all the administrative tasks
  3. Third, you need to register the Offshore Development Center to make it a legal entity of the chosen nation
  4. The next step is to find an office, rent it, and possibly renovate it to meet the needs of the new team of tech experts.
  5. Fifth, you must communicate with the local tax authorities to understand how much you need to pay to open the center.
  6. After that, you need to find support staff to manage the office and locate recruiters who will find you top talent in the area
  7. The seventh step focuses on running a campaign to build your brand and present your company as an appealing employer in the new location
  8. Finally, recruit the tech experts by looking through the list of links presented by recruiters

These steps represent the basic process of setting up your Offshore Development Center. However, there is almost a hundred percent chance that you will face difficulties or some hiccups during one or more phases. That is why it is vital to know what particular challenges might arise and how to overcome them.

Challenges and Solutions with Dedicated Offshore Development Center

There are several key types of problems that you might face when setting up an Offshore Software Development Center. Respectively, be ready to deal with these:

  • Issues with productivity and performance. This challenge arises because of the mismatched expectations and the fact that a hired team might not bring the results you intended. To resolve this challenge, you need to be transparent during the hiring process, provide customer support services, and get regular feedback on the project delivery.
  • Issues with team management. An offshore team might need to improve its customer-centric approach or lose track of the initial systems and processes. It will lead to the project needing to catch up. As a solution, evaluate the Offshore Development Center services before using them.
  • Issues with communication. Working with offshore teams means there is a high probability of communication challenges. These arise when the teams working in a foreign country need more language proficiency or need more communication tools at hand. To resolve this issue, make sure the candidates are chosen via English interviews and the offshore team knows.
  • Issues with cultural barriers. This challenge is among the most common in Offshore Development Center services. The approach entails working with a diverse group, which means people from different cultural backgrounds. Cultural gaps can be involved, the ones translating in communication and management issues. To deal with the issue, make sure to study the cultural background of your team. Besides, it is important to study the cultural scope of the nation you are outsourcing to.
  • Issues with different legal aspects. Entering new markets means opening new horizons and stepping into uncharted territory. Each country has its own regulations, policies, and laws. In many cases, you might accidentally break those, which means legal problems. To resolve this challenge, conduct a thorough analysis of the nation’s legal landscape. Besides, get to know its policies, procedures, and potential geopolitical issues. You might find out that the country is on the verge of political turmoil, which will definitely affect your Offshore Development Center.

All the issues mentioned above can pose a major threat to your outsourcing project. However, with the solutions presented, you can mitigate any upcoming issues. Often, it is better to prepare in advance and not be caught off-guard when some obstacle emerges.

The Bottom Line

Setting up the Offshore Dedicated Center can mean a difference between a product delivered on time and for low cost and a product not delivered at all. In the right hands and with the right tools, Offshore Development Center services are an excellent opportunity to get high-quality products for reasonable costs. Yet, to tap into what the method offers, you need to keep all the in-depth insights mentioned above.